TE3 brings economic scholars together with government and industry practitioners to explore transportation and fuel research for energy and environmental policies that will foster progress toward long-term climate protection and business goals.Learn More
Energy solutions are a problem more complex than any one discipline. From biofuel research to policy development to green building, the Energy Institute University of Michigan is the front door for all things energy at U-M. MITRE is the intellectual hub for U-M Economics, promoting instructional excellence and research accomplishments for economics faculty and students at the University of Michigan.Learn More
Mark Barteau, Director, University of Michigan Energy Institute
MODERATOR: Ryan Kellogg (Professor, Irving B. Harris Graduate School of Public Policy Studies, University of Chicago)
Lawrence Levin (VISA Decision Sciences), Matthew Lewis (Clemson University), Frank Wolak (Stanford),
“High Frequency Evidence on the Demand for Gasoline”
Ken Gillingham (Yale), Christopher Knittel (Massachusetts Institute of Technology), David Rapson (University of California, Davis),
“The Household Vehicle Portfolio: Implications for Emissions Abatement Policies”
Abstract: This session includes two papers that demand a rethinking of consumer demand for fuel efficiency. The first, “High Frequency Evidence on the Demand for Gasoline,” presents a comprehensive analysis of the price elasticity of fuel demand, based on daily fuel consumption and price data. The authors consistently find elasticities of demand that are ten times greater than estimates using more highly aggregated data, and explain the sources of aggregation bias. The second, “The Household Vehicle Portfolio: Implications for Emissions Abatement Policies,” finds that households value diversification of vehicle types, and that as much as 75% of the potential gasoline savings from exogenously increasing the fuel economy of a household’s first car may be eroded by their choice of a less efficient second car.
MODERATOR: John DeCicco (University of Michigan)
Soren Anderson (Michigan State University and National Bureau for Economic Research), Carolyn Fischer (Resources for the Future), Alex Egorenkov (Resources for the Future),
“Overlapping Strategies for Reducing Carbon Emissions from the Personal Transportation Sector”
Ryan Kellogg, Professor, Irving B. Harris Graduate School of Public Policy Studies, University of Chicago,
“Gasoline Price Uncertainty and the Design of Fuel Economy Standards”
Abstract:This session features two papers that challenge conventional wisdom on policies for reducing vehicle GHG emissions. The first, “Overlapping Strategies for Reducing Carbon Emissions from the Personal Transportation Sector,” analyzes current federal renewable fuel standards, size-based fuel economy standards, and direct taxes on carbon and gasoline, as well as suggested optimal combinations. It finds that the current mix of overlapping policies leads to substantial reductions in greenhouse gas emissions, but also induces behavioral changes that are highly cost-ineffective. The second, “Gasoline Price Uncertainty and the Design of Fuel Economy Standards,” examines optimal CAFÉ standards when future fuel prices are highly uncertain. It finds that the optimal standard is relatively lax and may not even be binding at expected future gas prices.
MODERATOR: Mark Barteau (Director, University of Michigan Energy Institute, DTE Professor of Advanced Energy Research, College of Engineering)
Fei Xie (Oak Ridge National Laboratory), Zhenhong Lin (Oak Ridge National Laboratory), David Greene (University of Tennessee)
"Exploring Factors Affecting Compliance of CAFÉ and GHG Standards: A Consumer Choice Based Analysis"
Eugenio Miravete (University of Texas at Austin), Maria Moral (Facultad de Ciencas Economicas y Empresarials, UNED), Jeff Thurk (University of Notre Dame)
"Innovation, Emissions Policy, and Competitive Advantage in the Diffusion of European Diesel Automobiles"
Abstract: This session presents two papers focused on whether automobile manufacturers can afford to comply with federal emissions standards, and whether policymakers bias their standards to benefit domestic manufacturers. The first, “Exploring Factors Affecting Compliance of CAFE and GHG Standards: A Consumer Choice Based Analysis,” estimates market acceptance of fuel economy efficiency technologies and alternative fuel vehicle technologies, with simulation results indicating that both standards can attain full compliance even if fuel economy technologies turn out to be more costly than expected. The second, “Innovation, Emissions Policy, and Competitive Advantage in the Diffusion of European Diesel Automobiles,” uses detailed Spanish data to show that EU policy promoted diesel vehicles by setting weak standards on their emissions, which amounted to a significant non-trade barrier to competition, effectively cutting imports by 50%.
Chair: Tom Lyon (Associate Director, University of Michigan Energy Institute; Dow Chair of Sustainable Science, Technology and Commerce, School of Business and School of Natural Resources and Environment)
Abstract: The most recent data show CO2 emissions from the U.S. transportation sector overtaking those from electricity generation for the first time in nearly 40 years. Moreover, transportation demand is projected to grow indefinitely, and recent increases in petroleum supply present an ongoing obstacle to large-scale adoption of alternative fuel vehicles. Thus, while the midterm evaluation of light vehicle CAFE and GHG standards is now a major focus of discussion, the task beyond 2025 -- not just for light vehicles, but also for medium and heavy duty trucks and air travel -- looks ever more daunting. This year's policy panel will discuss the knowns and unknowns regarding options for mitigating transportation GHG emissions in the decades beyond 2025, with an emphasis on economic and policy considerations for the United States while acknowledging the global nature of the major markets for vehicles and fuels.
Sponsorship opportunities are available; contact Susan Fancy for more information.